Experiences of Some Countries in Public Higher Education and Lessons for Vietnam

for public service units and Circular No. 71/2006/TT-BTC dated August 9, 2006 of the Ministry of Finance guiding the implementation of Decree No. 43/2006/ND-CP. However, in the process of implementing Decree 43/2006/ND-CP, there are still some limitations such as: The State budget (NSNN) still allocates funds in an average manner, not linking the allocation of funds to units with the quantity and quality of education and training services, so it does not encourage units to improve training quality. In addition, the main source of revenue for higher education institutions is tuition fees at a very low level, only covering a small part of training costs, not meeting the requirements of promoting socialization of education... Due to the above shortcomings and limitations, the Government issued Decree No. 60/2021/ND-CP dated June 21, 2021 on the financial autonomy mechanism of public service units. The Decree takes effect from August 15, 2021. The Ministry of Education and Training was assigned to preside over the development of regulations for the autonomy mechanism of public higher education institutions and has sent it for comments from ministries, branches, localities, appraisal opinions of the Ministry of Justice and has submitted it to the Government for comments from Government members (2 times). However, to date, the draft Decree regulating the autonomy mechanism of public higher education institutions has not been approved.

- Innovate the method of allocating state budget funds for higher education in the direction of prioritizing higher state budget support and reducing tuition fees for basic science majors, majors that the State needs but are not attractive to learners as well as training institutions (basic science majors, atomic energy, traditional arts, agriculture, forestry and fisheries...). Reduce the level of state budget support and increase tuition fees for majors that are based on individual needs, majors with high potential for socialization (majors in finance, banking, commerce and some other majors).

- For higher education institutions assigned by the State to train human resources for difficult-to-enroll majors, majors serving key economic development, etc., providing human resources for industrial parks, remote areas, mountainous areas, islands, and ethnic minority areas: The State budget provides funding by ordering and assigning tasks based on calculating all operating costs to ensure training quality meets output standards.

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Implement financial mechanism innovation for groups of public service units providing public service services, self-guaranteeing all operating costs in the direction of implementing the mechanism of capital allocation to preserve capital development and cost accounting, and management like enterprises.

- Second, innovate the mechanism of autonomy and self-responsibility for finance and assets for public universities :

+ About tuition and career fees

Full-time tuition fees for mass programs: In fact, the government has issued Decree No. 81/2021/ND-CP dated August 27, 2021 on the mechanism for collecting and managing tuition fees for educational institutions in the national education system and policies on tuition exemption and reduction, support for learning costs, and service prices in education and training to replace Decree 86/2015/ND-CP, Decree No. 145/2018/ND-CP to remove regulations on tuition fee ceilings.

Tuition fees for high-quality training programs: Based on legal regulations and the regular expenditure level provided by the State, a pilot program will allow a number of training institutions to set their own tuition fees for high-quality training programs commensurate with the conditions for ensuring quality according to the principle of covering training costs and publicly announce the tuition fees for the school year and the expected full course for each program before organizing enrollment. The school is responsible for reporting to the Ministry of Education and Training before implementation.

Tuition fees for training programs according to social needs, training by address, according to orders of local businesses. Ministries, branches, international training joint programs. Based on the agreement of the parties involved, training institutions are allowed to decide on appropriate tuition and fees to cover all training costs, while supporting investment in improving facilities and equipment for teaching and scientific research.

For science and technology transfer service activities and educational training consulting services under contracts with domestic and foreign organizations and individuals, the school is allowed to decide on specific collection levels and revenues according to the principle of covering costs and having accumulation.

+ About using financial resources

Financial resources of training institutions include:

Revenue from the State budget: (i) Expenditures for regular activities, (ii) Expenditures for implementing scientific and technological activities, national target programs and other tasks assigned by competent authorities, (iii) capital for investment in building facilities, purchasing equipment for training activities, scientific and technological research according to annual projects and plans, (iv) Counterpart funds for projects approved by competent authorities, (v) ODA aid.

Other legal sources of income: (1) Tuition and fees collected from students, (2) Revenue from training cooperation activities, scientific and technological activities, (3) Revenue from production, business and service activities, (4) Investment from domestic and foreign organizations and individuals to develop education according to the provisions of law, (5) Sponsorship, aid, support, gifts and donations from domestic and foreign organizations and individuals, (6) Other legal sources of income according to the provisions of law.

The school is autonomous in planning and using regular state budget funds and other legal sources of revenue to spend on regular activities, enhance training capacity, scientific research and school management on the basis of complying with the school's internal spending regulations and state regulations on financial management.

Open an account at the State Treasury to reflect the State budget expenditures; open a deposit account at a commercial bank to reflect the expenditures from the school's legal sources of income (use bank deposit interest as a legal source of income).

+ Regarding asset management and use:

Public training institutions are allowed to manage and use state assets for production and service business purposes according to the functions and tasks assigned under the Law on Management and Use of State Assets No. 09/2008/QH12 dated June 3, 2008; Law on Management and Use of Public Assets No. 15/2017/QH14 dated June 21, 2017 to replace the Law on Management and Use of State Assets 2008; Decree No. 52/2009/ND-CP

dated June 6, 2009 of the Government and Decree No. 04/2016/ND-CP amending and supplementing a number of articles of Decree No. 52/2009/ND-CP dated June 3, 2009 of the Government detailing and guiding the implementation of a number of articles of the Law on Management and Use of State Assets.

For self-owned assets, schools manage and use them according to the provisions of the school's internal spending regulations, including: Deciding on the purchase of assets, investing in the construction of facilities from the career development fund, capital mobilized according to the school's development plan approved by competent authorities; participating in bidding for service activities, in accordance with the school's professional fields; using the brand, reputation, quality, investment assets from the career development fund, loans, capital mobilized by lecturers and civil servants in the school to decide on joint ventures and associations with domestic and foreign organizations to invest in construction, purchase machinery and equipment for service activities in accordance with the functions, tasks of the school and regulations of law.

Joint venture and association activities with domestic and foreign organizations and individuals to invest in development and implementation of school service activities are entitled to incentives according to Government regulations, in Decree No. 69/2008/HD-CP dated August 30, 2008 and Decree No. 59/2014/ND-CP of the Government amending and supplementing a number of articles of Decree No. 69/2008/ND-CP dated May 30, 2008 of the Government on policies to encourage socialization of activities in the fields of education, vocational training, health, culture, sports, and environment.

2.5. Experience of some countries in public higher education and lessons for Vietnam

Studying experiences to suit the content of the financial management mechanism is very broad and different in each country. Within the scope of the thesis, the focus is on selecting the two most basic issues: the method of allocating the state budget (financial resources from the state budget) and tuition policy (mobilizing financial resources outside the state budget). At the same time, a number of countries with different levels of higher education, from countries with similar levels to Vietnam today to countries with increasingly high levels of development, are selected to be able to refer to the roadmap for innovation of higher education in general, and the financial management mechanism for higher education in particular.

2.5.1. Experience in budget allocation and tuition policy in the US

2.5.1.1. Overview of the higher education system in the US

The United States classifies degree-granting higher education institutions in the United States into major groups: public two-year institutions, or community colleges; private not-for-profit institutions (research universities, junior colleges, some two-year institutions affiliated with religious organizations; women's colleges; black colleges and universities, etc.); and private for-profit institutions. Although public institutions account for only 37.2% of the total number of institutions, they account for 73% of the number of students [85].

Responsibility for the management of public higher education institutions lies with the State governments. The level and method of management in the States are not the same; it may be through the form of management in the States that is not the same; it may be through the form of local election of a board of directors to operate the community colleges, or the State Governor appoints a board of directors to operate, or the State authorities will directly manage the schools according to their functions without establishing a board of directors.

2.5.1.2. Budget allocation for higher education in the US

According to Statista's 2018 report, the US invests 2.5% of GDP in higher education, of which public investment is 0.9% of GDP and private investment is 1.6% of GDP. Higher education spending includes expenses for the operation, maintenance and construction of public community colleges, universities and graduate training institutions such as law schools and medical schools.

Because the United States is a federal state, funding for higher education is distributed at three levels; federal government, state government, and local government.

Federal government budget allocations for higher education

The allocation of budget for higher education in the United States is done with the view of limiting government intervention and following market competition to improve the quality and efficiency of education. The federal government's budget is reserved for student support and scientific research. Universities wishing to participate in federal government financial aid programs must comply with

many requirements set by the federal government, from teacher training to gender equality in school activities.

State and local government budget allocations for higher education

State funding plays an important role for universities. In 2013, of the total $143.4 billion in support for regular higher education operations, $81.2 billion (57%) came from state and local budgets (SHEEO, 2014) [106]. From 1977 to 2019, state and local government spending on higher education increased from $110 billion to $311 billion (an increase of 184%). In 2019, state and local government spending was equivalent to 9% of total direct state and local government spending. As a share of direct state and local government spending, higher education was the fourth largest expenditure in 2019, nearly equal to health and hospital spending. In 2019, 89% of higher education spending went to operating costs, such as instruction, administration, research, libraries, dormitories, dining halls, and other student or faculty services. The remaining 11% went to capital expenditures such as construction and maintenance [100].

There are two ways to allocate state funding to schools: input-based funding and performance-based funding. Input-based funding is typically based on student enrollment, faculty, staff, and other resources needed to provide educational services. However, this method is considered to be no longer appropriate in the context of the US economy's increasing need for college-educated workers (Tandberg and Hillman, 2013) [107]. Performance-based funding is a system of allocating state education funding based on specific performance measures such as course completion rates, credit completion rates, and degree completion rates. Performance-based funding was used in 26 states in the US between 1979 and 2007 (Miao, 2012) [95]. Currently, 25 states in the US do this and 5 states are switching to this allocation method. In fact, spending on higher education is a significant part of the budget.

state but a small share of local spending. In 2019, 18% of general direct state spending went to higher education compared to 3% of general direct local spending. States spend more directly on higher education than localities. The federal government contributes to higher education primarily by providing direct financial aid to students. In 2019, California, Florida, Illinois, Mississippi, and Wyoming were the only states where local direct spending on higher education accounted for 25% or more of total state higher education spending.

2.5.1.3. US tuition policy

According to Marcucci and Johnstone (2007) [91], in the United States, tuition fees are set at the state or local level. The average tuition fees of higher education institutions in the United States show a significant difference between public and private universities, as well as between universities offering two-year and four-year courses. Tuition fees at four-year private universities are three times higher than those at public universities (four years) and nearly ten times higher than those at public universities (two years).

In addition to tuition and other instructional-related fees (such as lab fees), higher education costs include revenues from dormitories, university cafeterias, and bookstores. However, the composition of higher education funding has also changed significantly over the past 40 years. Specifically, higher education costs as a share of total higher education spending increased from 30% in 1977 to 40% of total state and local higher education spending in 2019. Tuition plus other instructional-related fees accounted for $96 billion (31%) and other receipts for fees were $29 billion (9%). Furthermore, tuition alone increased from 19% of higher education spending in 1977 to 31% in 2019. The increase in tuition as a percentage of higher education spending is partly due to a decrease in direct state appropriations per student over this period. That is, state and local spending on higher education increased over this period only because tuition increased [100].

Some states have grant programs for students who reside and attend schools in the state. Sometimes these grant programs are limited.

for students attending public schools in the state. Depending on the state, these programs may be need-based or merit-based. Many states also have special scholarship or loan forgiveness programs for students who are hired for relatively low-paying jobs that are of particular importance to the state after graduation.

Universities also offer financial aid to students based on financial need or based on merit. Merit-based aid is one way that universities in the United States attract students with strong academic or athletic achievements.

2.5.2. Korea's experience in allocating budget for education

2.5.2.1. Overview of the higher education system in Korea

South Korea is one of the most highly educated countries in the world. According to the Organization for Economic Cooperation and Development (OECD), 70% of 24- to 35-year-olds in the country of 51.5 million have completed some form of higher education—the highest percentage in the world and more than 20% higher than the equivalent attainment rate in the United States. At the undergraduate level, South Korea’s universities have less of a global reputation; however, the country was ranked 22nd out of 50 countries in the 2018 Ranking of National Higher Education Systems by the Universitas network of 21 research universities.

It can be said that the higher education system in Korea is relatively centralized. Important issues for the management of higher education institutions include criteria for establishing universities and colleges, the establishment of departments, student intake quotas, recruitment, credit hours, etc., all of which are subject to education laws and regulations. The Ministry of Education is an important government agency in monitoring and coordinating university policies. The Korean Council for University Education (KCUE) is another agency that plays a coordinating role in higher education.

2.5.2.2. Budget allocation for higher education in Korea

According to OECD (2013), Korea's public expenditure on higher education is 0.7% of GDP while the OECD average is 1.1%. Subsidies from the Korean Ministry of Education

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